10 Steps to Product/Market Fit

10 STEPS TOPRODUCT/MARKET FIT hashtag: #startupfest ASH MAURYA @ashmaurya http://www.ashmaurya.com

products9/10 startups fail

66% drastically change their original plans

Not a better Plan A but a path to a plan that works.

Lean Startup is a systematic process for iterating from Plan A to a plan that works before running out of resources.

Plan that works = Scalable, repeatable, business model

Product/Market Fit is the first thing that matters.

via Tara Hunt (@missrogue)

Agenda: 10 Steps to Product/Market Fit1. Document your Plan A2. Tackle the riskiest parts first3. Maximize for speed, learning, and focus

Reasonably smart people can rationalize anything but entrepreneurs are especially gifted at this.

Business Model versus Business Plan

Business Model versus Business Plan A document investors make you write that they don’t read

Business Model versus Business PlanA single diagram of your business

Problem Solution Unique Value Unfair Customer Proposition Advantage SegmentsTop 3 problems Top 3 features Single, clear, Can’t be easily Target compelling copied or customers message that bought states why you are different and Key Metrics worth buying Channels Key activities Path to you measure customersCost Structure Revenue StreamsCustomer Acquisition Costs Revenue ModelDistribution Costs Life Time ValueHosting RevenuePeople, etc. Gross Margin PRODUCT MARKETLean Canvas is adapted from The Business Model Canvas (http://www.businessmodelgeneration.com) and is licensed under theCreative Commons Attribution-Share Alike 3.0 Un-ported License.

1 Your product is NOT “the product”.

Your “product” is NOT the productProblem Solution Unique Unfair Customer Value Advantage Segments Proposition Key Metrics ChannelsCost Structure Revenue Streams

Your “business model” IS the productProblem Solution Unique Unfair Customer Value Advantage Segments Proposition Key Metrics ChannelsCost Structure Revenue Streams

2 Brainstorm multiple models and prioritize where to start.

Brainstorm possible models Time

Prioritize where to start 1. Customer Pain Level 2. Ease of Reach 3. Price/Gross Margin 4. Market Size Time

Identify the riskiest parts of your model Time

3 Understand the three stages of a startup.

3 Stages of a Startup Problem/Solution Product/Market Scale Fit Fit Stage 1 Stage 2 Stage 3

3 Stages of a Startup Problem/Solution Product/Market Scale Fit Fit Do I have a problem worth solving?

3 Stages of a Startup Problem/Solution Product/Market Scale Fit Fit Have I built something people want?

3 Stages of a Startup Problem/Solution Product/Market Scale Fit Fit How do I accelerate growth?

Before Product/Market Fit Problem/Solution Product/Market Scale Fit Fit Focus: Validated Learning Experiments: Pivots Terrain: Qualitative

After Product/Market Fit Problem/Solution Product/Market Scale Fit Fit Focus: Validated Learning Focus: Growth Experiments: Pivots Experiments: Optimizations Terrain: Qualitative Terrain: Quantitative

4 Focus on the right macro metrics.

Key Metrics Acquisition How do users find you? Activation Do users have a great first experience? Retention Do users come back? Revenue How do you make money? Referral Do users tell others?

Before Product/Market Fit Acquisition How do users find you? Activation Do users have a great first experience? Retention Do users come back? Revenue How do you make money? Referral Do users tell others? Value metrics

After Product/Market Fit Acquisition Activation Retention Growth metrics Revenue Referral

Learning Speed

FocusLearning Speed

The optimal learning loop Premature SpeedOptimization Chasing your tail Learning Focus Run out of resources

5 Formulate falsifiable hypotheses.

Too Vague: Being known as an “expert” will drive early adoptersSpecific and Testable: Blog post will drive >100 early sign-ups

6 Architect for learning.

Landing Page > Pricing > Signup

7 Architect for speed.

Most learning happensSome learning here Requirements Development QA Release Very little learning

Most learning happensSome learning here Continuous Requirements Release Deployment Shorten cycle time

8 Go only as fast as you can learn.

BACKLOG IN-PROGRESS (1) DONE

VALIDATED LEARNINGBACKLOG IN-PROGRESS (1) DONE

9 Validate Qualitatively, Verify Quantitatively.

Qualitative Quantitative Start here Verify with data

The ideal conversion dashboard is part analytics and part customer relationship management.

10 Systematically test your model.

Systematically test your model Time

Systematically test your model ... Time

Questions? RUNNING LEAN http://RunningLeanHQ.com Buy PDF: $19 Save 20% - Discount Code: STARTUPFESTAsh Mauryatwitter: ashmauryablog: http://www.ashmaurya.com

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10 Steps to Product/Market Fit

by ashmaurya on Jul 14, 2011

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